A 15 kilobase pair (kb) EcoR1 DNA fragment from normal Balb/c mouse genomic DNA containing sequences (sarc) homologous to the acquired cell sequences (src) of Moloney sarcoma virus (MSV) was cloned in phage lambda. The sarc region (1.2 to 1.3 kb) of the 15.0 kb cell fragment was indistinguishable from the src region of two isolates of MSV as judged by heteroduplex and restricton endonuclease analyses. The cellular sequences flanking sarc showed no homology to MSV sequences of Moloney murine leukemia virus (MMuLV) origin (T.G. Wood, project No. ZO1-CP-05156-01-LMV). Cloned subgenomic portions of MSV that contain src transform NIH-3T3 cells in vitro with high efficiency (ZO1-CP-05103-01-LMV). In this same assay, the cloned normal cell sarc fragment was inactive. A hybrid DNA molecule, formed by introducing M-MuLV sequences 5' to sarc activated the transforming potential of sarc.